Property, plant and equipment are carried at cost, plus the estimated value of any associated legally or contractually required
retirement obligations. Property, plant and equipment are depreciated primarily using the straight-line group method. Under the straight-line group method, assets dedicated to
providing telecommunications services (which comprise the majority of our property, plant and equipment) that have similar physical characteristics, use and expected useful lives are categorized in
the year acquired on the basis of equal life groups for purposes of depreciation and tracking. Generally, under the straight-line group method, when an asset is sold or retired, the cost
is deducted from property, plant and equipment and charged to accumulated depreciation without recognition of a gain or loss. A gain or loss is recognized in our consolidated statements of operations
only if a disposal is abnormal or unusual. Leasehold improvements are amortized over the shorter of the useful lives of the assets or the lease term. Expenditures for maintenance and repairs are
expensed as incurred. Interest is capitalized during the construction phase of network and other internal-use capital projects.

Employee-related
costs directly related to construction of internal use assets are also capitalized during the construction phase. Property, plant and equipment supplies used internally are carried at
average cost, except for significant individual items for which cost is based on specific identification.

We
have asset retirement obligations associated with the legally or contractually required removal of a limited group of property, plant and equipment assets from leased properties, and
the disposal of certain hazardous materials present in our owned properties. When an asset retirement obligation is identified, usually in association with the acquisition of the asset, we record the
fair value of the obligation as a liability. The fair value of the obligation is also capitalized as property, plant and equipment and then amortized over the estimated remaining useful life of the
associated asset. Where the removal obligation is not legally binding, the net cost to remove assets is expensed in the period in which the costs are actually incurred.

Note 6: Property, Plant and Equipment

The components of our property, plant and equipment as of December 31, 2008 and 2007 are as follows:

December 31,

Depreciable
Lives

2008

2007

(Dollars in millions)

Property, plant and equipmentnet:

Land

N/A

$

101

$

101

Buildings

15-30 years

3,412

3,388

Communications equipment

5-10 years

20,047

19,832

Other network equipment

8-45 years

20,927

20,904

General purpose computers and other

5-11 years

2,104

2,190

Construction in progress

N/A

179

231

Total property, plant and equipment

46,770

46,646

Less: accumulated depreciation

(33,725

)

(32,975

)

Property, plant and equipmentnet

$

13,045

$

13,671

During
2008, we recognized charges of approximately $6 million, or less than $0.01 per basic and diluted share, for impairment of network assets associated with the transition to
our new Verizon Wireless arrangement from our pre-existing wireless services arrangement with a different provider.

In
2008, as a result of decisions to discontinue certain product offerings and exiting our expiring wireless services arrangement, we changed our estimates of the remaining economic
lives of certain assets, which accelerated the depreciation of those assets. This change resulted in additional depreciation expense of $21 million for the year ended December 31, 2008.
The additional depreciation, net of deferred taxes, reduced net income by approximately $13 million, or less than $0.01 per basic and diluted share, for the year ended December 31, 2008.

During
2007, we changed the estimates of the remaining economic lives of our communications and other network equipment. This resulted in a net increase in depreciation expense in our
consolidated statements of operations of $19 million ($0.01 per basic and diluted share) for the year ended December 31, 2007.

The components of our property, plant and equipment as of December 31, 2007 and 2006 are as follows:

DepreciableLives

December 31,

2007

2006

(Dollars in millions)

Property, plant and equipmentnet:

Land

N/A

$

101

$

100

Buildings

15-30 years

3,388

3,355

Communications equipment

7-10 years

19,832

20,052

Other network equipment

8-45 years

20,904

20,440

General purpose computers and other

4-11 years

2,190

2,285

Construction in progress

N/A

231

142

Total property, plant and equipment

46,646

46,374

Less: accumulated depreciation

(32,975

)

(31,795

)

Property, plant and equipmentnet

$

13,671

$

14,579

During 2007 and 2006, we changed the estimates of the remaining economic lives of our
communications and other network equipment. This resulted in a net increase in depreciation expense in our consolidated statements of operations of $19 million ($0.01 per basic and diluted share) in 2007 and $27 million
($0.01 per basic and diluted share) in 2006.

The components of our property, plant and equipment as of December 31, 2007 and 2006 are as follows:

DepreciableLives

December 31,

2007

2006

(Dollars in millions)

Property, plant and equipmentnet:

Land

N/A

$101

$100

Buildings

15-30 years

3,388

3,355

Communications equipment

7-10 years

19,832

20,052

Other network equipment

8-45 years

20,904

20,440

General purpose computers and other

4-11 years

2,190

2,285

Construction in progress

N/A

231

142

Total property, plant and equipment

46,646

46,374

Less: accumulated depreciation

(32,975)

(31,795)

Property, plant and equipmentnet

$13,671

$14,579

During 2007 and 2006, we changed the estimates of the remaining economic lives of our
communications and other network equipment. This resulted in a net increase in depreciation expense in our consolidated statements of operations of $19 million ($0.01 per basic and diluted share) in 2007 and $27 million
($0.01 per basic and diluted share) in 2006.

Asset impairments
recognized for property, plant and equipment and internal use software projects for the years ended December 31, 2005, 2004 and 2003 were $0 million, $113 million, and $230 million, respectively.